Commentary and analysis on markets, personal finance, and wealth building from a contrarian perspective. "I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting there and trying to dream it up all yourself. Nobody’s that smart."
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Wednesday, August 9, 2017

Apartment boom in Mongolia

(snip)Since the collapse of the Soviet Union — but primarily in the last decade — Ulaanbaatar has oscillated between construction boom-town, and a city shaken by stark recession, forged by predatory lending patterns and bad loans. While the city’s house price index has shown only modest growth since its initiation in 2013, buy-to-let properties in the city’s most desirable buildings are delivering very strong returns for investors.(snip)“Expatriate workers are returning to Mongolia in droves, and mining companies have shown an economic commitment which outstrips any involvement we’ve known before,” Kacper explains. “The demand for high quality apartments that are actually complete and ready for market, outstrips what can be delivered this year,” he reiterates. Even as he eats French fries fried three times over in one of Ulaanbaatar’s swankier eateries, he scours the cityscape himself — like a golden eagle, in Must de Cartier shades. He skips dessert to countersign for his latest acquisition — with a wide prospector’s smile, and a rose-gold pen by Dupont.

The recent Sales Managers Index reports from Mongolia have shown that the economy is in fact truing around. The current Chinese restrictions on North Korean coal coupled with closure of some Chinese mines have raised prospects for Mongolian coal producers.

In addition the recent IMF bailout of Mongolia has hopefully led to a change in sentiment at the margin by investors. I remain bullish on Mongolia and have been acquiring shares of property developer Mongolia Growth Group at these low levels.